New York Markets After Hours

CSC warns of profit miss, cuts jobs

TedGriffith

EL SEGUNDO, Calif. (CBS.MW) - Computer Sciences stock plunged nearly 40 percent after the company said Friday it will eliminate up to 900 jobs and will fall well short of Wall Street's profit expectations.

Shares closed down $21.40 to $32.70.

Citing a "sharp" falloff in demand for consulting and other information technology services, Computer Sciences
CSC, -16.88%
said it plans to cut between 700 and 900 jobs and take a fourth-quarter charge against earnings of between $100 million and $150 million.

Computer Sciences also said it will fall below earnings expectations. The company said it now expects fiscal fourth-quarter earnings, before special charges, of between 35 cents to 37 cents per share. The El Segundo Calif.-based company had been expected to earn 92 cents per share, according to the average estimate of analysts polled by First Call/Thomson Financial.

Computer Sciences said that, based on its "preliminary" forecasts for fiscal 2002, it now expects per-share earnings in the range of $2.50 to $2.60. Analysts had expected $3.24, according to First Call.

The company said its business is suffering because many of its customers in the Internet and health care fields are being affected by the economic downturn.

"While CSC previously noted that economic uncertainties and capital spending constraints were adversely impacting its outlook, the sharp decline in demand for consulting and systems integration services has become more widespread as it extends from the U.S. to Europe," the company said in a statement.

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